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INLAND EMPIRE OFFICE LEASING SLOWS, HOWEVER, VACANCIES CONTINUE TO FALL, MID-YEAR REPORT REVEALS

 INLAND EMPIRE OFFICE LEASING SLOWS, HOWEVER,
 VACANCIES CONTINUE TO FALL, MID-YEAR REPORT REVEALS
 ONTARIO, Calif., July 29 /PRNewswire/ -- Office leasing slowed in the Inland Empire in the second quarter of 1992, however, with little new construction and continued positive absorption, the vacancy rate continued to fall, according to a mid-year report released today by Grubb & Ellis Commercial Real Estate Services.
 "We have seen a slowdown in activity, however, the amount of vacant office space continues to decrease as new tenants enter the market and existing tenants expand," said Les Copelin, office properties specialist with Grubb & Ellis' Riverside office.
 The vacancy rate stood at 22.9 percent in the Riverside/San Bernardino County area as the second quarter ended, down from the previous quarter's 23.6 percent, as well as the 24.9 percent posted a year ago. In the two-county area, 2.9 million square feet of office space was vacant from an existing base of 12.6 million square feet.
 Net absorption, or the net change in occupied space from one quarter to the next, totaled 107,879 square feet for the second quarter. That was down from the previous quarter's total of 219,862 square feet, as well as the 286,291 square feet recorded during the second quarter of 1991.
 Net absorption for the first six months of 1992 totaled 327,741 square feet, down from the 487,017 square feet absorbed during the first half of 1991.
 "Although absorption is down, the marketplace remains active," said Copelin. "However, it's taking much longer to complete transactions in today's market. Tenants are driving hard bargains with landlords, which is slowing the process."
 Gross absorption totaled 224,448 square feet for the second quarter in the two-county area. That was a decrease from the previous quarter's total of 386,629 square feet, as well as the 421,364 square feet recorded during the second quarter of 1991.
 For the first half of 1992, gross absorption totaled 611,077 square feet, which was down from the 718,667 square feet posted for the first six months of 1991.
 Leading the Inland Empire in terms of net absorption for the second quarter was the Ontario/Rancho Cucamonga/Fontana submarket with 73,245 square feet. Year to date, 137,961 square feet of office space has been absorbed in this submarket, which posted a vacancy rate of 25 percent.
 Significant transactions closed in the first half of the year in this submarket included three in Ontario:
 -- Curoflex leased 19,247 square feet in One Lakeshore Centre.
 -- So. Pacific Financial Corp. leased 6,903 square feet in
 Transpark.
 -- Avery labels leased 5,900 square feet in Empire Towers.
 The Riverside/Corona/Moreno Valley submarket, with a vacancy rate of 22 percent, posted 48,147 square feet of net absorption in the second quarter and has absorbed 144,566 square feet of office space year to date.
 Significant transactions closed in the first half of the year in this submarket included three in Riverside:
 -- University of La Verne leased 8,183 square feet at 1189 Iowa.
 -- State of California - Water Resources Board leased
 16,494 square feet in Magnon Business Park.
 -- State of California - Employment Development Department -
 27,000-square-foot build to suit in Iowa Corporate Center.
 The San Bernardino/Redlands/Colton submarket had a slow second quarter posting 3,515 square feet of negative absorption and a vacancy rate of 21 percent. The largest transaction in the quarter was 11,000 square feet leased by Impact Group in Redlands. Year to date this submarket has absorbed 57,180 square feet of office space.
 Chino/Montclair/Upland posted a vacancy rate of 21 percent and 14,201 square feet of negative absorption in the second quarter. Year to date, this submarket has posted 601 square feet of negative absorption.
 Victorville, the Inland Empire's smallest office market, had 4,203 square feet of positive absorption in the second quarter and posted a vacancy rate of 33 percent. Through the first six months of the year, this submarket has recorded 11,365 square feet of negative absorption.
 The amount of office space under construction in the Inland Empire in the second quarter totaled 103,566 square feet, down from 120,337 square feet a year ago. The space under construction included a 71,069-square-foot building in San Bernardino and a 32,497-square-foot building in Victorville.
 -0- 7/29/92
 /CONTACT: Sharon Abar of Grubb & Ellis Commercial Real Estate Services, 714-937-0881/ CO: Grubb & Ellis Commercial Real Estate Services ST: California IN: SU:


AL-CH -- LA017 -- 4628 07/29/92 12:51 EDT
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Date:Jul 29, 1992
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